In this week’s issue of Circle of Competence (#142) (highly recommended), one of the shared reads was a white-paper from the Yale School of Management, On the Nature of Long-Term Holds [of business investments].
Looking back at the companies I’ve been most interested to invest in, I’ve found a pattern where I subconsciously favour businesses that are holding companies or have multiple, independent lines of business.
One of the ways I intuitively infer if a company continues to grow well and potentially has some kind of scale economics is if the Gross Revenue is growing faster than the growth in the operating expenses side over any given period.
“What doesn’t kill you makes you stronger.”Friedrich Nietzsche “And if at first you don’t succeed,Dust yourself off and try again,You can dust it off and try again.”Try Again by Aaliyah featuring Timbaland Another useful mental model that I’ve put into my investing toolbox, is looking for products/businesses that have survived near-death experiences.
One of themes that has become an investing mental model of mine is how successful businesses (and/or products) become a standard in the customers’ minds.
Learning from Nicholas Sleep (Investment Masters Class) How to Disrupt Network Effects (Breadcrumb.vc, Sameer Singh) Strategy in a Post-Fixed Costs Economy (aperture.co, Ben Robinson)